Spotify has announced another record quarter of profits, marking a significant turnaround since it increased the prices of its Premium plans for the first time last year.
The Swedish audio streaming service reported an operating income of 266 million euros (about $289 million) for the second quarter, a significant improvement from a loss of 247 million euros ($268 million) during the same period last year. The company also saw a 14% year-over-year growth in monthly active users, reaching a total of 626 million.
CEO Daniel Ek expressed optimism about the company’s trajectory, stating, “It’s an exciting time at Spotify. We keep on innovating and showing that we aren’t just a great product, but increasingly also a great business. We are doing so on a timeline that has exceeded even our own expectations, which bodes very well for the future.”
Following the favorable earnings report, Spotify’s stock rose by nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced another price increase for its U.S. Premium users starting this month. Individual plans will see a $1 increase to $12, Duo plans will rise by $2 to $17, and Family plans will increase by $3 to $20. This followed an average price increase of $1 implemented last July, which was the first hike in membership costs in 13 years.
Despite these price adjustments, the company managed to add seven million net subscribers during the quarter, exceeding its previous guidance by one million.
Spotify has established itself as the leading audio streaming platform globally, with users showing a lower likelihood of canceling their subscriptions compared to other streaming services, according to a Bloomberg analysis.
However, Spotify’s financial journey has not always been smooth. The company experienced a significant decline in stock value in 2022, losing over two-thirds of its worth as it confronted several quarters of operating losses. In January 2023, Spotify announced plans to lay off 600 employees, and less than a year later, it made a substantial cut of 1,500 jobs, representing about 17% of its workforce.